Cloud accounting company, Xero (ASX: XRO), is eyeing the Artificial Intelligence (AI) and machine learning space, calling it the “next wave of accounting innovation”.
Xero CEO and founder, Rod Drury, said machine learning and automation will open up the next phase of innovation in accounting, driving a transition in the industry bigger than the move to the cloud did 10 years ago.
He highlighted cloud innovation as the technology that drove Xero’s reach of more than one million subscribers worldwide on its global cloud accounting platform. And the move towards AI and machine learning could further fuel its subscriber base.
“We invested for the long-term to build a business and ecosystem to achieve those numbers. It’s very satisfying to deliver on that promise,” he said.
“With technology doing more of the time-consuming, data entry work, we will see more accountants take on advisory and virtual CFO roles within the small businesses they support.
“Rather than just keying in data, they’re interpreting the output - and with the power of machine learning, they’ll provide higher level advisory services that help clients feel in control of their finances which is a key human function that cannot be replaced,” he said.
He also said machine learning and automation will be the “wave” which enables the company to “scale to service millions of small businesses and advisors around the world”.
“Together with our accounting partners and small business owners, we’re so excited to lead the industry innovation charge,” Drury said.
Xero has been driving datasets to drive insights and machine learning, with the recent completion of its complex migration to Amazon Web Services (AWS), consolidating the platform on a set of technologies that builds on connections and data.
Xero’s machine learning system can now code invoices for small businesses, categorise expenses and recommend accounting practices to a potential client, automating the work of accounting and freeing advisors up to focus on providing clients with expert advice.
However, Xero recently revealed that its decision to migrate its hosting from Rackspace to AWS has impacted its half-yearly financial performance.
The company told shareholders on 3 November 2016 that the duplicate platform costs of transitioning from Rackspace to AWS has hit its financial performance for the period.
In November last year, Xero revealed changes to its organisational structure, leading to the departure of the cloud software company’s US leader.
In June that year, the company announced its expansion plans in Australia, adding 50 tech jobs across the country, bringing its then employee count to more than 300.